Display posts from previous

Sort by

Some background first. I'm half way through a rtw cycle trip, and have been working abroad to fund the second half of my long trip. I'll have a pot of around Â£40,000 when I hit the road again in July(-ish). I need an investment strategy that ticks the following boxes:

1) provides Â£600 per month for 2 years, sufficiently safe for this period that I'm not suddenly stranded, financially wiped out, in central asia.

2) fairly minimal maintenance of investment - I might be away from Internet for weeks at a stretch.

3) With the exception of the above requirements, I'm happy with a long term investment and with medium-high risk.

The obvious solution is to stick Â£15000 somewhere safe and accessible to fund the trip and invest the other Â£25000 in something longterm, but I'd rather put the whole lot to work, and I'm sure there must be some sort of investment out there that on the upside returns a very high yield in its initial 2 years and is highly unlikely to go bust in that time frame; but on the downside requires a long term commitment, and is medium-high risk beyond the first 2 years. I am aware that a Â£600 monthly return on a Â£40000 investment is asking a lot, so I don't expect my initial capital to grow or even keep its value, whilst I'm taking an income from it.

There was a time when the obvious answer to a problem like this would be a P2P investment in amortising loans, such as is offered by the likes of Ratesetter. I don't think the rates on offer at RS justify the risk/hassle any more.

However, there may be some other options in the P2P space that are a bit more attractive. I know Ablrate has a few such loans running currently. This would enable you to cut the amount you put into a safe current account, although you'd still want a few months worth held in reserve to cover any late payments and buy you time to draw down from your longer term investments in case of a default.

Some investment schemes promise unusually high return in the early years. My impression is that often they are outright or borderline scams. Your capital is very much at risk and it may be difficult to exit the investment, if there is not a secondary market for the investment product.

There are threads somewhere here about park homes, hotel room and car park investments which maybe fit that bill.

I think you've answered your own question OP, the basic tenet of any investment is to match the risk against return and timescale is an important issue. So if you need Â£16k in a few months then that is totally separate to the remainder which has longer timescale. An analogy might be someone entering retirement and going into drawdown, in that case it's often recommended to hold enough cash for a year or twos expenses to allow flexibility in managing and accessing the longer terms investments.

More importantly how you will access and manage the finances whilst away, as you point out you may be away from Internet access for some time and even then security might be an issue.

P2p seems to offer potential for your medium term targets, Moneything and Ablrate are both good, soem of their loans amortise.

Interesting answers, thank you! Big Adaj and masonic, p2p is a good suggestion, will probably form a part of what I end up doing. Ray, you're hitting the same sort of ideas that I was thinking, but I suspect your caution about them is very wise, was just hoping that I had missed an obvious very high yielding investment that had a fighting chance of holding on to a fairly decent percentage of my initial capital!